Slide 1: Third quarter results
Third quarter results 29 October 2024
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Orkla ASA (the “Company”) solely for information purposes. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Certain statements included in this presentation contain various forward-looking
Slide 3: Q3-24 | Continued strong earnings momentum
Q3-24 | Continued strong earnings momentum Picture TBD • EPS (adj.) of NOK 1.77 (+10%) • Underlying EBIT (adj.) growth of 17%1 • Organic growth of 3.9%1 and positive volume/mix • Cash conversion of 112%1 Note: 1. Consolidated Portfolio Companies incl. HQ. Organic growth excluding HQ Alternative Perf
Slide 4: Breakdown of Portfolio Companies' performance in Q3-24
Breakdown of Portfolio Companies’ performance in Q3-24 Anchor Grow and build Transform or exit R12M EBIT (adj.) margin 12.1% 12.5% 6.6% 13.4% 14.5% 11.2% 11.1% 11.3% 2.5% 0.0% 10.6% 10.0% Underlying EBIT (adj.) growth (Q3-24 vs. Q3-23) 16.8% 19.2% 17.7% 13.0% 8.4% 22.8% 24.6% 8.7% -32.0% -338.9% 15.
Slide 5: Portfolio Company targets 2023-2026 (consolidated)
Portfolio Company targets 2023-2026 (consolidated)1 Underlying EBIT EBIT (adj.) Return on Capital Employed (adj.) growth margin (ROCE) 18.6% 10.5%-11% 13% 10.0% 9.0% 11.2% 9.9% 8%-10% (CAGR) 6.9% 2023 YTD-242 2023-263 2023 R12M 20263 2023 R12M 20263 Note: 1: Including HQ; 2. Growth as at YTD-24 vs.
Slide 6: Financial Performance
Financial Performance Arve Regland, EVP Finance and CFO All Alternative Performance Measures (APMs) are presented in the appendices All figures in NOK million unless otherwise stated
Slide 7: EBIT (adj.) growth of 18% for the Consolidated Portfolio Companies
EBIT (adj.) growth of 18% for the Consolidated Portfolio Companies Key quarterly figures Q3-24 Q3-23 ∆ Q3 Operating revenues 17,512 16,783 4% EBIT (adj.) Consolidated Portfolio Companies 2,086 1,772 18% EBIT (adj.) Financial Investments 161 244 -34% EBIT (adj.) HQ and Business Services -100 -109 -11
Slide 8: Continued improvement in EBIT (adj.) margin
Continued improvement in EBIT (adj.) margin Underlying EBIT (adj.) margin change Consolidated Portfolio Companies | R12M EBIT (adj.) margin (incl. HQ) (Q3-24) Underlying EBIT (adj.) 12.0% EBIT (adj.) 11.7% 11.6% Category Portfolio Company margin margin 11.4% (R12M) change1 11.5% 11.2% 11.3% 11.0% Or
Slide 9: Broad-based positive volume/mix performance
Broad-based positive volume/mix performance Breakdown of organic growth by price Organic growth1 split for the Consolidated Portfolio Companies and volume/mix (Q3-24) Organic growth 1.3% 1.6% 4.3% 9.6% 8.1% 13.4% 8.5% 6.0% 5.3% 3.6% 3.3% 3.9% (Y/Y) Category Portfolio Company Price Vol/Mix Orkla Food
Slide 10: Cash flow improvement from EBIT (adj.) growth and lower net replacement investments
Cash flow improvement from EBIT (adj.) growth and lower net replacement investments Figures in NOK billion YTD YTD Q3-24 Q3-23 Cash conversion (R12M) EBIT (adj.) 5.4 4.5 Cash Category Portfolio Company Depreciation and write-downs 1.9 1.8 conversion Change in net working capital -0.4 -0.3 Orkla Food
Slide 11: NIBD/EBITDA at 1.8x
NIBD/EBITDA at 1.8x Figures in NOK billion = 1.8x EBITDA1 18.8 2.4 18.3 0.7 = 1.4x 6.0 EBITDA2 5.8 0.8 0.9 1.0 Net interest- Cash flow from Taxes Financial items Dividend Net paid to Expansion capex FX effects Net interest- bearing debt operations & Other items received shareholders and net M&A and
Slide 12: Portfolio Companies
Portfolio Companies Arve Regland, EVP Finance and CFO All Alternative Performance Measures (APMs) are presented in the appendices. All figures in NOK million unless otherwise stated.
Slide 13: Jotun: Continued strong momentum
Anchor Grow and build Transform or exit Jotun (42.7% - associated company) Continued strong momentum Jotun 100% basis YTD Aug-24 YTD Aug-23 Key comments Revenues 22,573 21,589 • Year to date, sales grew in all segments, led by double-digit Revenue growth – fixed rate 8% 18% growth in Protective • Pr
Slide 14: Orkla Foods Europe: Underlying EBIT (adj.) growth and increased cash conversion
Anchor Grow and build Transform or exit Orkla Foods Europe Underlying EBIT (adj.) growth and increased cash conversion Q3-24 YTD-24 Key comments Revenues 5,026 15,089 • Underlying EBIT (adj.) growth from stronger focus on category Contribution ratio 40.2% 39.3% and product profitability, and cost in
Slide 15: Orkla Confectionery & Snacks: Improved performance at the biscuit factory
Anchor Grow and build Transform or exit Orkla Confectionery & Snacks Improved performance at the biscuit factory drives EBIT (adj.) growth Q3-24 YTD-24 Key comments Revenues 2,327 6,935 • Broad market share growth in the quarter Contribution ratio 44.2% 43.4% • Softening demand in the chocolate segm
Slide 16: Orkla Food Ingredients: EBIT (adj.) increase in Q3
Anchor Grow and build Transform or exit Orkla Food Ingredients (59.4%)1 EBIT (adj.) increase in Q3, primarily from volume/mix growth Q3-24 YTD-24 Key comments Revenues 5,012 14,335 • Volume/mix growth driven by Bakery and Sweet Contribution ratio 30.3% 29.8% • Solid EBIT (adj.) growth in Bakery and
Slide 17: Orkla Health: Continued volume/mix growth
Anchor Grow and build Transform or exit Orkla Health Continued volume/mix growth Q3-24 YTD-24 Key comments Revenues 1,903 5,605 • Revenue growth driven by volume/mix in several markets Contribution ratio 57.3% 57.3% • Favorable mix and price increases positively affected margin EBIT (adj.) 293 857 •
Slide 18: Orkla India: EBIT (adj.) margin improvement despite modest revenue growth
Anchor Grow and build Transform or exit Orkla India (90%)1 EBIT (adj.) margin improvement despite modest revenue growth Q3-242 YTD-242 Key comments Revenues 797 2,336 • Revenue growth driven by International Business, partly offset Contribution ratio 38.8% 37.8% by weak domestic market sentiment • L
Slide 19: The European Pizza Company: Strong profit growth
Anchor Grow and build Transform or exit The European Pizza Company Strong profit growth on the back of pricing and good cost control Q3-24 YTD-24 Key comments Revenues 796 2,269 • Strong momentum and earnings growth in Da Grasso in Contribution ratio 43.0% 42.9% Poland • Soft consumer sales in the N
Slide 20: Orkla Home & Personal Care: Continued EBIT (adj.) growth
Anchor Grow and build Transform or exit Orkla Home & Personal Care Continued EBIT (adj.) growth Q3-24 YTD-24 Key comments Revenues 667 1,977 • Market shares in Norway continue to develop positively across Contribution ratio 41.0% 40.7% both Home Care and Personal Care • Revenue growth driven by posi
Slide 21: Orkla House Care, Health and Sports Nutrition Group, Pierre Robert Group
Anchor Grow and build Transform or exit Orkla House Care Health and Sports Nutrition Group Pierre Robert Group EBIT (adj.) improved by sales Continued topline growth, Significant EBIT (adj.) decline and margin growth but lower contribution margin due to lower volume and obsolete provision in Norway
Slide 22: Closing remarks
Closing remarks Nils K. Selte, President and CEO All Alternative Performance Measures (APMs) are presented in the appendices. All figures in NOK million unless otherwise stated.
Slide 23: New management structure effective from 1 November
New management structure effective from 1 November Nils K. Selte President and CEO Maria Syse-Nybraaten Øyvind Torpp Audun Stensvold Hege Holter Brekke Arve Regland Camilla T. Robstad EVP and Investment EVP and Investment EVP and Investment EVP and Investment EVP and CFO EVP legal and Executive Exec
Slide 24: 3 Commitments
3 COMMITMENTS Drive organic value Execute value- Reduce complexity in existing adding structural of existing portfolio portfolio transactions 24
Slide 25: Q&A
Q&A Nils K. Selte, President and CEO Arve Regland, EVP Finance and CFO
Slide 26: Upcoming events
Upcoming events Fourth quarter results 13 February 2025 26
Slide 27: Appendices
A ‘Orkla Appendices rkla
Slide 28: Financial Investments: Hydro Power and real estate
Financial Investments High inflow and power production in the quarter contributed to strong results despite lower power prices Hydro Power Fully consolidated into Orkla’s financial statements Volume Power prices1 EBIT adj. (GWh): (øre/kWh): (NOK million): NO1 Q3: 176 (179) NO1 Q3: 20.9 (19.3) Q3: 14
Slide 29: Sound financial profile
Sound financial profile Net interest-bearing liabilities (NOKbn) NIBD / R12M EBITDA 18.8 18.3 2.0x 17.2 1.8x 1.8x 1.5x 12.8 1.0x 0.9x 16.5 16.0 6.6 6.4 15.2 10.8 0.5x 3.0 4.9 4.9 2018 2019 2020 2021 2022 2023 Q3-241 2018 2019 2020 2021 2022 2023 Q3-24 Leasing debt Ex. leasing debt Note: 1. Of which
Slide 30: Funding sources and maturity profile per Q3-24
Funding sources and maturity profile per Q3-24 Debt maturity average maturity 2.9 years Funding sources (in NOKbn) NOKbn 8 2.3 7 9.0 6 9.1 5 4 3 2 9.2 1 0 Cash, cash equivalents and interest-bearing assets 2024 2025 2026 2027 2028 2029 2030 2031 Bonds and CP Drawn amounts - Orkla Group excl. Orkla F
Slide 31: Overview of financial targets (1/3)
Anchor Overview of financial targets (1/3) Revenue EBIT margin Cash conversion ROCE 13-14% 133% >15.0% 127% 14.0% 12.1% 11.1% 12.4% >100% Orkla Foods 6.6% Europe 2.2% 2-3% 2023 YTD-24 Target1,2 2023 R12M Target 2023 R12M Target 2023 R12M Target (2026) Volume-mix EBIT margin Cash conversion ROCE >15.
Slide 32: Overview of financial targets (2/3)
Grow and build Overview of financial targets (2/3) Revenue Underlying EBIT ROCE 8.7% 12.0% 10.8% 11.1% 12.5-13% Orkla Food 5.0% 6.9% 6.2% Ingredients -0.1% 2023 YTD-24 Target1 2023 R12M Target 2023 YTD-24 Target1 Revenue EBIT margin 9.2% 7-9% 13.4% 13.4% 14.0% Orkla Health 6.3% 2023 YTD-24 Target1 2
Slide 33: Overview of financial targets (3/3)
Transform or exit Overview of financial targets (3/3) Underlying EBIT Cash conversion Orkla Home & 35.5% 33.0% 128% 90% 100% Personal Care >10.0% 2023 YTD-24 Target1 2023 R12M Target EBIT margin Orkla House 11.3% 14-15% 9.6% Care 2023 R12M Target Revenue EBIT margin Cash conversion Health and 10.4%
Slide 34: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Contribution ratio Contribution margin ratio is calculated by dividing the contribution margin by operating revenues. Operating revenues minus variable operating expenses constitute the contribution margin. Variable operating expenses are reported on the financ
Slide 35: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Change in underlying EBIT (adj.) Change in underlying EBIT (adj.) shows like-for-like EBIT (adj.) growth for the group’s business portfolio, and is defined as the group’s reported change in EBIT (adj.), adjusted for effects of the purchase and sale of companies
Slide 36: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Return on Capital Employed (ROCE) cont. Average capital employed is always an average of the closing balances in the five last reported quarters. ROCE shows the return that the Orkla group receives on the capital invested in the various consolidated portfolio c
Slide 37: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Net interest-bearing liabilities Net interest-bearing liabilities are the sum of the group’s interest-bearing liabilities and interest-bearing receivables. Interest-bearing liabilities include bonded loans, bank loans, other loans, lease liabilities and interes
Slide 38: ‘Orkla
‘Orkla